There were several initial theories on what caused the pound panic in Asia - including a 'fat finger' mistake in inputting data - but the most likely explanation was a rogue algorithm in an automated trading system triggering a wider sell-off.

Image:The moment the pound's value against the dollar crashed in Asia trading is clear to see in this chart

IG Markets' analyst Angus Nicholson said it "looks like it was an algorithm-driven flash crash", adding that "given low volumes in the Asian session, it would have forced other algorithms to join in and magnify the fall".

The Bank of England said that while it has no powers of regulation over the market, Governor Mark Carney has asked the Bank for International Settlements to look into the events in order to discover whether any lessons can be learned.

It has been a rollercoaster week for sterling in the wake of the EU referendum fallout.

Investors were spooked by confirmation that the Prime Minister would trigger Article 50, the official Brexit process, by March next year and comments the market saw as Britain keen to leave the European single market so the Government could tighten its grip on immigration.